Who headed the Government of India's alternative mechanism committee set up to examine and approve proposals for the merger of public sector banks?

Introduction / Context:
To strengthen the banking sector, the Government of India explored consolidation of public sector banks through mergers. For this purpose, an alternative mechanism or committee of ministers was formed to consider and approve proposals for such mergers. Competitive exams often ask who headed this committee, since it is important in the context of banking reforms.

Given Data / Assumptions:

• The committee was formed to examine merger proposals of public sector banks.
• It is referred to as an alternative mechanism set up by the Union Government.
• The options list well known economic and financial leaders: Raghuram Rajan, Bimal Jalan, Arun Jaitley and Y. V. Reddy.
• We assume the question refers to the period when major PSB merger decisions were announced.

Concept / Approach:
Bank merger decisions are ultimately political and policy choices, so the head of such a committee is expected to be the finance minister of the time rather than a central banker or former governor. During the key phase of public sector bank consolidation, Arun Jaitley was the Union Finance Minister and headed the alternative mechanism committee. This was widely reported in economic and banking news.

Step-by-Step Solution:
Step 1: Identify that the committee relates to government-driven mergers of public sector banks.Step 2: Recall that such high level committees are usually chaired by the sitting finance minister.Step 3: During the period in question, Arun Jaitley served as the Finance Minister of India.Step 4: Check the options and locate Arun Jaitley among them.Step 5: Choose Arun Jaitley as the correct answer.

Verification / Alternative check:
General awareness summaries and exam memory-based questions clearly state that the committee to oversee merger of public sector banks was headed by Finance Minister Arun Jaitley. Other figures listed in the options, such as former RBI Governors Raghuram Rajan, Bimal Jalan and Y. V. Reddy, are associated with monetary policy and central banking, not with this particular government merger panel.

Why Other Options Are Wrong:

• Raghuram Rajan: A former RBI Governor known for monetary policy stance and financial sector insights, but he did not chair the ministerial merger committee.
• Bimal Jalan: Another former RBI Governor who chaired committees on central bank reserves and related matters, not this PSB merger mechanism.
• Y. V. Reddy: Also a former RBI Governor with important contributions, yet he was not the head of the government's PSB merger committee.

Common Pitfalls:
Candidates may see familiar names of central bank governors and incorrectly associate them with any banking reform committee. The key is to distinguish between technical committees (often headed by former governors) and ministerial committees or alternative mechanisms (usually headed by serving cabinet ministers, especially the finance minister). Remembering that the finance minister at that time, Arun Jaitley, led the PSB merger committee helps avoid confusion.

Final Answer:
The committee for examining and approving public sector bank mergers was headed by Arun Jaitley.